Lean and Scientific Management: Sequel or Substitute? David S. Hoyte Nova Southeastern University Regina A. Greenwood Southern Management Association October 30, 2015

The Authors Regina A. Greenwood David S. Hoyte Chair, Management Department, Huizenga College of Business and Entrepreneurship, Nova Southeastern University Workshop Instructor on Generational Differences, Honda Supplier Network Ford Lean Advisory Group Historian, Academy of Management Historian, Management History Division Executive in Residence, Decision Sciences Faculty, Huizenga College of Business and Entrepreneurship, Nova Southeastern University President, Transformation Management LLC Distinguished Fellow, The Center for Operational Excellence, OSU Senior Advisor to Honda Supplier Network; Ford Lean Advisor. Certified Lean Leader and Instructor, OSU Southern Management Association October 30, 2015

Research Question Lean Management, based on the Toyota Production System, is transforming today’s business operations with a management philosophy and practices based on continuous pursuit of perfection. Scientific Management, based on the work of Taylor and the Gilbreths, transformed the industrial world in the early 20th century and is the basis for many traditional management practices today. While areas of overlap are apparent, is Lean Management built on the foundation of Scientific Management, or is it a unique, revolutionary approach to achieving operational excellence? Southern Management Association October 30, 2015

What is Lean? Lean is a Management philosophy for organizing and managing work, using a system of techniques and principles that identify and eliminate waste. Lean is a way of thinking and operating on a daily basis to engage employees in process optimization, error prevention, and a never ending search for better methods that improve safety, quality, productivity, and cost. Copyright 2011 Transformation Management - all rights reserved

Definitions VA – value added is activity that converts raw material into characteristics for which the customer is willing to pay Waste – any activity that consumes time or cost without adding value (also called NVA) – or any activity that the customer will not pay for. Muri – Overburden Mura - Fluctuation Muda - Any of the 7 wastes Muri (too much) Muda (waiting) Mura (work load variation)

Muri - Overburden Scientific Management Lean Management The Gilbreths recognized that a steady pace with breaks was overall more productive than a high pace. Toyota (NUMMI shown) ensures employees are not over-burdened, using balance boards, done by the team, to tally elemental times in seconds against a target cycle time objective. Southern Management Association October 30, 2015

Mura - Unevenness Scientific Management Lean Management The Gilbreths, like management at that time, accepted fluctuation as a routine part of business that simply needed to be accommodated. Toyota (NUMMI shown) ensures minimal fluctuation by leveling all process rates to ensure that flow is smooth and even, then controlling through visual management. Southern Management Association October 30, 2015

Muda: Examples of Wastes Observed in Work Motion (bend) Motion (walk) Transportation Over-production Waiting Defectives Extra processing

Typical Related Wastes March 2004 Overproduction, Transportation, Inventory, & Defectives

Area of Commonality: Motion Elemental work, motion, and pace are scrutinized to the smallest detail for opportunity Southern Management Association October 30, 2015

Similarities within Motion Analysis Scientific Management Lean Management Ergonomics was a significant concern, resulting in special scaffolds for bricklayers Workplace layout, ergonomics, materials within easy reach all are part of designing a Lean work cell. Southern Management Association October 30, 2015

Difference: Quality Control Scientific Management Lean Management Inspection-based quality; sort the bad from the good Prevention-based quality systems or “Poka Yoke” to error proof critical operations.

Difference: Improvement Scientific Management Lean Management Management does the improvement The natural work group (team) is responsible for all improvement Southern Management Association October 30, 2015

Difference: Production Control Scientific Management Lean Management Stay busy, make more, absorb overhead costs Production is controlled by a replenishment signal, automatically as stock is consumed

Difference: Inventory Control Scientific Management Lean Management Excess stock is good “insurance” “Limbo Bars” prevent storing excess stock; Min/max is posted, excess is visible Southern Management Association October 30, 2015

Difference: Transportation Scientific Management Lean Management Conventional transport: One trip one load, low value added “AGV Train” on standard route “milk run”: One trip, many loads, high effectiveness

Comparison Summary Table Southern Management Association October 30, 2015

The Scientific Management stream of thought did not evolve into Lean. Conclusion Considerable differences in what is waste and how to eliminate waste Limited agreement on waste (overburden, transporting, the process itself, unnecessary motion) Scientific Management and Lean Management have a different philosophy and principles: Toyota’s early management practice was “production efficiency by consistently and thoroughly eliminating waste,” and “the equally important respect for humanity” (Ohno, 1988) The Scientific Management stream of thought did not evolve into Lean. Lean is a Substitute. Southern Management Association October 30, 2015

Limitations and Further Research Examined only the writings of Frank and Lillian Gilbreth as examples of Scientific Management Thought Examined only the trail of Scientific Management in Japan, not the development of Lean at Toyota* Next steps – examine more Scientific Management writers to determine if any anticipated the insights of Lean * For a brief history, see Emiliani, R. (2006). Origins of lean management in America: The role of Connecticut businesses, Journal of Management History, 12 (2), 2006, 167-184. Southern Management Association October 30, 2015

Questions? Southern Management Association October 8, 2015